Tom-Chris Emewulu
Chief Disputes Analyst

You probably don't not know this.

But researchers found that businesses spent a whopping $550 billion in returns in 2020 alone. That’s a 75.2% increase from 2016.

The reason for that quantum of expense is neither here nor there. Data from Narvar Consumer Report has it that as much as “41% of shoppers buy with the intent of returning.” A similar report from NRF states that about 6.5% or $22.6 billion of returns were fraudulent or abusive of store return policies.

But, of course, some returns result from orders that arrived damaged, the buyer ordered the wrong size, or the order did not meet their expectations. However you look at it, the fact remains that returns are part of e-commerce.

And if you don’t have an adequate framework for managing returns, your business will suffer. You’ll spend your working days in the rat race of customer correspondence, without much results, other than a high volume of shipping cost, to show for it. That’s especially true in these days of disruptions global supply chain.

If you are already in deep waters, don’t despair. You can quickly fix the problem with the tools we’re about to share with you in this article. You’ll create a compelling return policy that converts the dreadful returns and exchanges to an opportunity to stimulate customer loyalty and increase revenue.

Return policy: What it is and why you need one

Before we excavate the deep and best practices on how to write the most potent order return policy, we’d like to shed some light on why you need a return policy in the first place.

Per definition, “return policies are the rules a retailer creates to manage how customers return and exchange unwanted merchandise they purchased.” It’s a standard order document informing customers of the items they can return, under what circumstances they can return such items, and the time allotted for returns.

Businesses establish a return policy for the apparent fact that return requests drain your emotions and finances at the same time. It puts you two steps backward and paints a gloomy picture of your brand.

The realization that someone dislikes your product takes an emotional toll on vendors. And without a well-crafted return policy, customer displeasure can turn into angst and social media firestorm that’ll cost you so much money.

Having a customer-focused return policy is crucial. It’s a vital marketing instrument—you can’t do without it.

Case in point, experts say that up to “68% of shoppers check a website’s return and exchange policy before making a purchase.”

The long-term impact of having a customer-centric return policy is clear. You move from having a one-time customer to loyal advocates that help you reduce ads budget and increase conversion rate with their feedback and referrals. “66% of people trust consumer opinions posted online,” according to Nielson’s Global Trust in Advertising Report.

How to write a return policy that makes the bank

If you want to stay in business for long, having an excellent order return policy isn’t negotiable because “96% of people would shop with a retailer again based on an “easy” or “very easy” return experience.” And another research found that 60% of millennials have admitted to keeping a purchase they weren’t happy with because of a difficult return policy.

That data makes absolute sense when you put yourself in the customer’s shoes. Folks want to be sure they can return the merchandise when things go south.

A good return policy answers the customer’s most pertinent questions. Craft your policy to address all requests as one and ensure you don’t go the case-by-case route of answering customer concerns. That’s how you ultimately reduce Significantly Not As Described chargebacks and disputes.

The content of your return policy will be determined by the logistics of your e-commerce business and the merchandise you sell. However, below are generally acceptable ingredients that you should have in your order return policy:

  • Returnable items
  • Exchangeable items
  • “Sales Final” products (that is, items that are non-returnable, non-exchangeable)
  • Return or exchange timeframe
  • Order return conditions (e.g., lightly worn, with tags still on, original packaging, original condition, and so on.)
  • What customers can return products for, such as store credit, refund, a product of equal value, etc.
  • Channel for initiating a return or exchange (i.e., an email address to contact or a web page to visit).

Case Study: Overstock’s return policy

Analysts found that 60% of online shoppers make at least one return or exchange per year, 95% will make another purchase if the return experience is easy.

In the proceeding section, we share Overstock’s return policy to give you some ideas for presenting the details we discussed above. Observe how they explained their obligations to the customer.
If something doesn’t work out, you can send most items back within 30 days of delivery.*
  • Start the return process within 30 days of receiving your item.
  • We inspect all returned items. The product must be in new or unused condition, with all original product inserts and accessories.
  • Shipping costs will be the customer's responsibility in cases of buyer’s remorse returns, such as an item didn’t fit, didn’t like the color/quality, changed your mind, ordered by mistake, bought it somewhere else, etc.
  • We will refund the cost of the merchandise and shipping charges if the return is a result of our error or defective product.
  • Ship the product as soon as possible, so it arrives at our facility within 45 days of receiving the item. (See Product-Specific Return Policies for exceptions).
Please refer to the Seller’s policy for their return policy, located on the product page, by clicking on the Seller’s name.* You should note that this return policy does not apply to Marketplace Seller products (approved 3rd party sellers on Overstock.com). See our Marketplace Seller page for more details.
How to Return an Item
Click here to log in to My Account to fill out our return initiation form to receive your shipping label and return instructions. Don’t have an account? Check out our step-by-step guide, How to Return an Item.
Defective Product and Returns Due to Our Error
If there are mistakes with your order or products arrive defective/damaged at the time of receipt, we’ll make it right by:
  • Sending you replacement parts or accessories
  • Replacing the product or
  • Issue a refund**
  • And we’ll also cover the cost of any return shipping
  • If the product is not defective, return shipping fees will apply.
Products Returned After 30 days.
Did you miss the 30-day return window? Great news! You may still be able to start a return after 30 days. Contact Customer Care if you need to return an item outside the 30 return time frame. We would be happy to see how we can help.

Where to put your return policy and how to make the most of your return and refund policy

You’ve done an excellent job crafting an air-tight return policy. Now what? You’ve got to ensure it’s visible for the customer to see. It’s not enough that you have a fabulous return policy—you have to ensure that customers see it before they purchase.

Here are some data:

Below are some of the strategic places to put your return policy:

  1. Your website footer
  2. FAQ page
  3. Product page
  4. Cart and Checkout page
  5. Website chat

Ensuring your return policy makes sense, removes the need for customers to contact you when they need assistance, and sets the right expectations before the purchase will go a long way to limiting chargebacks and disputes.

Chances are, some customers will not be well pleased by your return policy. That’s okay. Not everyone who visits your store is a real customer. Do your best to be transparent and make the copy available for all.

Meeting customer expectations requires effort. Do your part in setting the standard for the transaction and creating a relatively effortless order fulfillment strategy. You could provide an environment that helps legitimate customers feel respected and encourage them to stand by you to attract others with good intentions.

Don’t make your return policy an after-thought—something you can quickly tack at the end of your sales strategy to fulfill obligations. Instead, put in the work and develop a clear return policy that aligns with a thoroughly designed return and exchange system. Equally important, writing a good return policy isn’t a one-time affair. You have to constantly optimize the copy to ensure it’s progressively valuable for your prospects.

Average Dispute Amount
Average Dispute Amount
$
30
# Disputes Per Month
# Disputes Per Month
#
50
Time Spent Per Dispute
Time Spent Per Dispute
M
20
calculation
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